Quid pro quo (from the Latin meaning “this for that”) is a commonly used term in business negotiations. It’s also the foundation of every employer/employee relationship.
To illustrate, let’s say the quid represents the compensation an employer is willing to part with in exchange for labor they need to operate their business. The quo, then, represents the amount of work an individual agrees to provide in exchange for an agreed compensation.
Our free market economy serves as the fulcrum of the employment teeter-totter. When the economy is brisk, it’s often marked by a labor shortage forcing employers to ante up more quid for the quo they need. When the economy falters, job seekers outnumber opportunities enabling employers to increase the quo for their quid, or to cut back on the quid without affecting the quo they’re receiving.
Both sides must have their needs met
Things stay in balance as long as both parties feel they are getting their needs met. However, if the employer feels they aren’t receiving sufficient quo for the quid they are dolling out, or the employee feels like they aren’t getting enough quid for all their hard quo, the equilibrium is compromised.
Just a few years ago, the scales were tilted heavily in favor of labor. My clients were screaming for young talent and they were willing to ante up significant quid to get quo. Any quo.
Reports of quick service restaurants in growing markets offering starting wages of $15 for part time help were common. The landscape was littered with help-wanted signs and young prospective employees clearly had the upper hand. (This is when Millennials/Gen Y first got saddled with the term “entitled”).
Then came the mortgage crisis and bank failures of 2008 causing a seismic shift in the employment equation. Within months, wages plummeted and the stacks of applications rose. In recent years, the job market has shown some improvement in some industries and in some geographic areas. However, the pendulum has swung the other way and it’s now the employers who are holding the cards..
A recent story from the Associated Press reports that 1 in 2 recent college graduates are either unemployed or are radically underemployed. Further, it points out that median wages for grads with bachelor degrees are now lower than they were in 2000.
Reassuring younger workers
Another recent story citing Pew Research suggests that the dismal employment numbers among young Millennial workers have more to do with poor work ethic than they do with the recessionary economy.
On occasion, I give a speech to an audience comprised of high school or college students and I ask for the frustrated job seekers in the crowd to raise their hands. I tell them I understand the pain, but then I reassure them:
Even in this climate, you can still find jobs; good jobs, really good jobs. They’re out there. I speak to employers every day who are hiring. If you have a job, you have the ability to earn higher wages, improved benefits, and exciting promotions in that job, even if you view it as a ‘dead-end job. However, these opportunities are available only to those who are intensely focused on improving their quo. Nothing will slow the advancement of a worker who is on a perpetual mission to increase their value to an employer by learning new skills, by improving their existing skill set, and by working harder to produce more and better results each and every day.
Conversely, if you decide to stop improving your quo, or worse yet — if you choose to withhold or withdraw quo to any degree – even if you feel you are not getting the quid you so rightly deserve–you are doing so at your own peril. You may lose your job, but even if you don’t, you will fall out of favor with your manager and your opportunities for advancement and increased wages will evaporate. What’s more, your personal brand will suffer, and believe me, your reputation for what you bring to the employment equation is going to follow you wherever you go. Employers talk to each other, and your brand in the employment marketplace is something you need to treasure and protect with all that you have.”
Yes, a labor shortage is coming
As for the advice I offer employers, it’s not that different, really.
Remember that a free-market economy is cyclical, and sooner rather than later, you will again be faced with a labor shortage. With the rapid retirement of Baby Boomers and the low numbers of Generation X’ers that exisit, your ability to attract Millennials to your team is going to be a pivotal factor in your success.
Don’t wait for the approaching labor shortage to hit you like Katrina. Prepare for the oncoming storm by improving your quid (i.e. what you offer your people in the way of wages, perks, job promotions, benefits, training, culture, etc.) right now. Be the place everyone wants to work.
Organizations that continually strive to improve their employment brand will always find it much easier to attract—and retain—the very best quo in every employment market, regardless of the economic climate.
PS – If you haven’t seen The Entitlement Creed on YouTube, check it out below. It’s a great take on the quid pro quo from an employer’s perspective.
This was originally published on Eric Chester’s Reviving Work Ethic blog. His new book is Reviving Work Ethic: A Leader’s Guide to Ending Entitlement and Restoring Pride in the Emerging Workforce. For copies, visit revivingworkethic.com.